Righthaven Completely Stops Showing Up In Court, Loses Key Case, Key Appeals And 'Big Name' Lawyer Who It Still Owes Money To

from the death-of-righthaven dept

Over the past few weeks there's been some more Righthaven news, as the company has continued the trend it started last year of not showing up and missing deadlines. Now it appears that it's just completely given up. CEO Steve Gibson is working at another job (while being investigated by the Nevada Bar) and main lawyer Shawn Mangano apparently has completely stopped responding to all attempts to contact him, even by the court. All this has resulted in the key appeals in its cases to be dismissed "for lack of prosecution." Last Thursday it also had a key case closed, with prejudice, driving another (yes another) nail in its already buried coffin.

Also, you may recall that, last summer, Righthaven trumpeted the fact that it had hired famed copyright maximalist lawyer Dale Cendali to help with some of the cases -- including this key one against the Pahrump Life blog. This hiring was part of why Gibson insisted that the courts respected Righthaven (even as they were losing case after case). Cendali is considered a bigshot in some copyright circles, leading some to think that Righthaven might actually have some ability to pull out of its tailspin. However, the sum total of her contributions to Righthaven's legal fights appears to have been a ridiculous filing last summer in which she tried to compare Righthaven to patent trolls -- an argument the court later found entirely unconvincing.

Cendali has now said she's withdrawn from all Righthaven cases, even though her name still appears officially as counsel for the company in one of the recently dismissed appeals. She claims that she was really just hired for couple small issues which she completed last summer (such as the filing mentioned above) and had been told that Mangano would handle the rest of the cases. She also has told the court that Righthaven hasn't paid her firm what it owes. Actually, other than the initial retainer, she says Righthaven't hasn't paid any other legal fees. In other words, Righthaven paid the initial retainer fee so it could blast out the fact that it hired her... and then refused to pay for any of the actual work she did. Par for the course for Righthaven.

Either way, with the dismissals of the key appeals, as well as the Pahrump Life case -- which was considered a key fight -- combined with the fact that pretty much everyone involved with Righthaven seems to have moved on to other things and is flat out ignoring anything Righthaven-related, when do we finally get to call the official time of death for Righthaven?

Re: Piercing the corporate veil

I think the path might be more confused than that.
From reading other articles on VegasInc it looks like rather than pay a $5000 sanction from the court that they could afford, they instead funneled the money to a 3rd party.

"Opsahl wrote in his declaration that his review of the Righthaven bank statement shows it had more than enough money on Aug. 11 to pay the $5,000 sanction — but instead made a $4,475 payment to an entity called Stephens Investments Holdings."

It looks like they just created Rightshaven to take the fall when it all went bad. The fact that money was being funneled out holds with how I expected them to operate. The money as it came in would vanish quickly out making sure that there would be nothing left should it go south.

I would expect piercing the veil would gain some ground after the bar is finished looking at Gibson. I am willing to bet the Stephens will have layers upon layers to protect themselves from anything bad happening to them, and Gibson testifying could really ruin their best laid plans.

Re: Re: Piercing the corporate veil

> "Opsahl wrote in his declaration that his review of the
> Righthaven bank statement shows it had more than enough
> money on Aug. 11 to pay the $5,000 sanction — but instead
> made a $4,475 payment to an entity called Stephens
> Investments Holdings."

Isn't that just ordinary Hollywood Accounting?

Avatar can't pay any royalties because it wasn't profitable. It's not that they didn't have Billions in the bank, it's that they had to pay most of that as a fee for, um, something, to the investors.

Why would it surprise anyone that other copyright scoundrels would use the same underhanded practices?

Re: Re: Re: Piercing the corporate veil

Re: Re: Piercing the corporate veil

It makes me wonder whether there should be some kind of audit of their finances, although I have no idea if that is legal in the context I'm thinking of.

The way I see it is that their debts should be paid in the order in which they accrued. So if they were sanctioned before the amount to Stephens Investments was invoiced then the sanction should have been paid first. Notice I'm going with invoiced rather than paid here, if the demand from Stephens Investments pre-dates the sanction then it would go there first.

The way it looks from your comment is that they were sanctioned and then arranged their finances after the fact to make it seem like there was not sufficient cash to cover the sanction. In my view that is a crock of...

Re: Re: Re: Piercing the corporate veil

Stephens Investments Holdings looks to be a holding company for the Stephens Family who were cocreators of Rightshaven and some of the newspapers represented by them.
It was a nifty way to funnel money out.

The payment to the Holding company was made AFTER the court sanction, as was shown by a review of their records that they had to use the court to pry out of them. The $5K didn't even begin to come close to the $138K (IIRC) they owed the defendant in that case.

What are the wider implications of Righthaven's ultimate decline? Was this a company that just got everything wrong or have specific legal clarifications been made and precedents been set along the way? What are the implictions for others who may try the same approach either now or in the future?

Re:

Lying to courts is a bad thing.
Sham transfers of only the nonexistant right to sue are bad things.
Not disclosing who has interests in the case is a bad thing.
An entire article being reposted was declared as fair use.

And I would guess from some of the quotes attributed to one of the lawyers calling courts slamming him in rulings advice & guidance, Cocaine is a hell of a drug.

The amount of face palm that is in this whole debacle is to the point of self flagellation.

The problem is the amount of wrongness that Righthaven has shown is astounding and I'm not sure that there is precedent for what any court or bar Association could and more to the point will (they are in a bind in that they basically have to now) do to them.

That's before we talk about the allegations of ineptitude and trading whilst insolvent.

I feel for the Investigators that have to wade through this shameful episode by Attorney/Solicitors who should of known better. And that includes Cendali, she has questions to answer as well.

Re: Re:

I'll save both them, and the embarrassed to hear it judge time: the 'it was all a bad dream' thing only works in movies/books(and only barely then), so I'm afraid they won't be able to duck out of it that easy.

Likewise, I'm fairly sure the 'my evil twin did it', 'the devil made me do it'(though considering whose interests they were fighting for, that one would actually be kinda true) and similar excuses also won't work, though they are more than welcome to try any of those, a comedic act can always use new jokes to freshen things up.

Still waiting for Sherman Fredericks and Steve Gibson to explain how Righthaven has an ace up their sleeve and its going to surprise us all and how this is just the judges giving Righthaven lawyers guidance. Seriously, anyone who used Righthaven should sue them for incompetence.

Righthaven never wanted to win. It was a game to knock websites off of the internet.

I saw 3 or 4 forums closed down because of lawyer issues. What does that mean now that Righthaven has closed down?

All of those forums closed for no reason at all. They could have stayed open because the copyright threats have turned out to be meaningless.

Righthaven and the people they worked for accomplished exactly what they set out to do. It does not matter that it was fear that closed those websites down instead of a Righthaven lawsuit. Those places are closed forever and their communities have been scattered across the internet.